Offsets: the hot air in Gillard’s climate plan

July 14, 2011

You could be forgiven for thinking that when the Labor government says its new carbon price plan will cut Australia’s greenhouse gas emissions by 5%, it means Australia’s emissions will fall by 5%. But you would be wrong.

Treasury modelling for the carbon price says Australia’s domestic emissions will go up by about 12% on 2000 levels by 2020.

Most of the emissions cuts predicted under the scheme won’t take place in Australia at all. Instead, big polluters will be able to buy carbon offsets for projects in other, mostly poor, countries. These carbon offsets will be credited as “Australian” emissions cuts.

See also: Carbon price: what’s in it for renewables?
Gillard’s carbon price: not a serious response
A carbon price reality check

Carbon offsets rely on the idea that individuals or companies can pay someone else to cut emissions on their behalf.

Australia’s carbon price plan allows companies to pay money to a carbon offset project.

The money is supposed to pay to preserve a patch of forest, or sometimes contribute to an energy-saving scheme. In return, the company will get a permit to pollute.

But rather than encouraging big polluters to cut carbon pollution in Australia, offsets push poor countries — that do very little to cause climate change — to make the cuts instead.

Friends of the Earth UK said in a 2009 report on carbon offsets: “Offsets are a swap of an emissions cut in developed countries for a cut in developing countries. But action in both is needed.

“Failure to cut in developed countries also results in delays in essential infrastructure changes necessary for deeper cuts in the future. Offsetting results in fewer emissions cuts. No amount of reform can alter this.”

Another problem with carbon offsets is whether they represent emissions cuts. The US Government Accountability Office said in 2009 that, “it is not possible to ensure that every credit represents a real, measurable, and long-term reduction in emissions”.

As British writer Johann Hari said in 2010, failed carbon offsets make things much worse.

He said: “When you claim an offset and it doesn’t work, the climate is screwed twice over — first because the same amount of forest has been cut down after all, and second because a huge amount of additional warming gases has been pumped into the atmosphere on the assumption that the gases will be locked away by the now-dead trees. So the offset hasn't prevented emissions — it's doubled them.”

US climate scientist James Hansen is another critic of carbon offset plans. He wrote in his 2010 book Storms of my Grandchildren: “The public must be firm and unwavering in demanding ‘no offsets’, because this sort of monkey business is exactly the type of thing that politicians love and will try to keep.

“Offsets are like the indulgences that were sold by the church in the Middle Ages. People of means loved indulgences, because they could practice any hanky-panky or worse, then simply purchase an indulgence to avoid punishment for their sins.

“Bishops loved them too, because they brought in lots of moola.

:Anybody who argues for offsets today is either a sinner who wants to pretend he or she has done adequate penance or a bishop collecting moola.”


One aspect of the market for Carbon Indulgences is that moola can be spread broader than the Bishop's grasp and may be a mechanism for indigenous land owners worlwide to gain some value for looking after their land and protecting their forests from shorter term benefits offered by loggers. Of course there is the problem of proving ownership of the land/asset in question and ensuring that it doesn't get mowed down later on.

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